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NJ AG files suits alleging storm price gouging

NEWARK, N.J. (AP) -- Residents desperate for a tank of gas or a place to stay in the wake of Superstorm Sandy were taken advantage of by some unscrupulous business owners looking to profit from the state of emergency, according to New Jersey's attorney general, who filed suit Friday against eight businesses for price gouging.

Attorney General Jeffrey Chiesa announced civil lawsuits against seven gas stations and a hotel in northern New Jersey, the first price gouging cases brought in the state since the storm.

The gas stations were accused of raising pump prices anywhere from 17 to 59 percent higher during the state of emergency related to the storm. The hotel was accused of raising room rates by 32 percent.

The state's Consumer Affairs Division has received nearly 2,000 complaints about alleged storm-related price gouging to date, Chiesa said, adding that about 83 percent involved gas stations. The division has issued more than 170 subpoenas to New Jersey merchants.

"We have hundreds of complaints still to investigate," Chiesa said. "Anyone seeking to prey upon the desperation of consumers during this state of emergency will find that the penalties far outweigh any ill-gotten profits."

Violators can be fined up to $10,000 for a first offense and up to $20,000 for a second offense under that state's price gouging statute, which prohibits increases of more than 10 percent higher than the normal course of business during a state of emergency, or for 30 days after it's lifted.

Merchants facing additional costs during an emergency are not allowed to exceed 10 percent above the normal markup from cost.

The businesses named in the complaints include a Howard Johnson Express in Parsippany run by the Ratan Hospitality Group, LLC., that was accused of increasing room rates to $119 per night during the storm, compared to its pre-storm rates of $90 per night. A person at the hotel referred calls his attorney, who did not immediately respond.

Among the seven gas stations charged, a Lukoil station in Paterson operated by Kistruga, Inc., was accused of raising pump prices by 59 percent, upping a gallon of regular gas from $3.45 to $5.50 during the storm. A call to the station was not answered.

A Clifton Gulf station called C.S. George & Sons Inc., was accused of raising regular gas prices to $4.69 per gallon, an increase of 34 percent. Owner John George, said the business that's been in his family for 52 years had gone to great lengths to help residents during the storm. George said he had to add 20 extra workers to his rolls, extend his normal 12-hour days to operate 24-7, feed his staff breakfast, lunch and dinner to keep the station open around-the-clock, and incur additional expenses, from the electricity required to keep the station open, to having to buy gas from a distributor in Massachusetts when it was unavailable in New Jersey. He said the 52 consumers who filed price gouging complaints against his station were out of more than 15,000 customers he estimated he served during the storm.

"I was open 24 hours a day - at that point in time that's what I felt was fair, I had so many extra expenses, and we made sure everybody on line got a full tank of gas," he said. "Instead of being a bad guy, I should be a good guy, we tried to do a service to this community, not a disservice."

A Lukoil station in Newark, run by Alen Service Corp., was accused of raising pump prices for regular gas by 25 percent, and diesel fuel by 31 percent. A phone message was not immediately returned.

A Delta gas station in Bloomfield operated by The Vinny Fuel Corporation was accused of raising its prices for regular gas by 35 percent to $3.99 per gallon. A number for the station continuously rang busy.

A BP station in Perth Amboy operated by NJPO, LLC, was accused of raising regular gas prices by 33 percent. A woman who answered the station's phone declined to comment.

An Exxon station in Lyndhurst operated by S&D LLC, was accused of increasing regular gas prices by 21 percent, and supreme-grade gas by 14 percent. A phones message was not immediately returned.

A Newark Sunoco station operated by Couto & Sons, Inc., was accused of raising the price of regular fuel by 17 percent during the storm, to $4.46 per gallon. It also allegedly raised the price of plus-grade, premium-grade, and ultra-grade fuel by 11 percent, and allegedly violated state law by increasing prices more than once during a 24 hour period. A phone call to the station went answered.

Chiesa said he expected price gouging complaints to subside in coming days, but warned that other storm-related scams would likely be on the increase.